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- [00:01]
NLW
Is the entire crypto market cap headed to $50 trillion? Not my words, but those of our friend Dan Tapiero. We're going to discuss that and all of the massive news stories of this week here on the Friday 5 with NLW. Let's go. Let's do Good morning everybody and happy Friday. Let's talk about really big numbers. We've got Dan Tapiero here, friend of the show. Sees crypto ecosystem reaching 50 trillion as he launches the new 500 million fund under 50T rebrand. It used to be 10T for those who remember because he thought crypto would go to 10 trillion. I always mocked him and said, why so bearish? I guess he listened.
- [00:55]
Dan Tapiero
Yeah, you know, changing times require changing updates, you know.
- [01:01]
NLW
Yeah, I mean, 50 trillion is a big number actually though. I mean, you know, stablecoins count as a part of the crypto market cap and if they explode to, you know, 10, 20 trillion over the next 10 years, this is pretty doable.
- [01:13]
Dan Tapiero
Yeah, I mean, 50 trillion sounds insane except when you realize it's a 10x from here. And also that like, you know, there's, there's a calculation going on here about sort of the general increase in global wealth. What portion of that, you know, resides in crypto? What portion of that is represented on crypto? You know, there's, there's a lot that goes into that.
- [01:30]
NLW
Right.
- [01:31]
Dan Tapiero
I think, you know, Dan is a sophisticated investor. He's not saying, you know, dogecoin goes to, goes to a trillion or anything like that. This is a much, a much sort of more comprehensive prediction.
- [01:42]
NLW
I put that headline. I would get another warning and get a strike. Dogecoin was going to do that. They would tell me that it was harmful content again. Here we go though with our first real story of the day. Senate will end up passing House version of crypto market structure. Says to Tom Emmer, this isn't exactly the story, obviously. The story as we know is that genius was passed into law last week going to the Senate. You actually unpacked this exceptionally well on the breakdown this week. Usually there's not much deference to the House from the Senate. They kind of rewrite their own bill and send it back and say, hey guys, sign this. We actually got an interesting and quick write up from the Senate and it's not exactly the House version. So maybe you can explain this further.
- [02:27]
Dan Tapiero
Yeah, so it's interesting. So we, we didn't really get like a full version of, of the bill or at least what, what we would have expected. The, the House version of this bill is, you know, hundreds of pages of long. What we got from The Senate was 20 something pages, maybe 30 something pages. It was really short relative to what you would expect. And the main point of difference was around how to handle the securities commodities classification sort of piece of things.
- [02:55]
NLW
Right.
- [02:56]
Dan Tapiero
Whereas in the House bill, there's a whole system for how a, a security like thing becomes not a security. In the, the Senate conversion of the bill, they're basically just treated as not a security a priori because they're, they're, they're named as some different type of asset class, an ancillary asset. It's basically, it harkens back to the original Lummis Gillibrand bill from a few years ago was sort of closer to their conception. You know, the, the, the key point I think for now is not which of these wins, but it's more of like how the, how it gets reconciled from here. The Senate bill is also sort of missing the CFTC portion of how to deal with things. It's really just focused on, you know, handing over a bunch of stuff to the sec. So it feels very starter, you know, a very sort of starting, starting place rather than, rather than complete. But, you know, it, it continues to advance the conversation and I think it creates space now for people who are actually interested in this to have the discussion around the right way to handle these, this, this thorny question that's been at the center of things forever, which is, are they securities? Are they not? And if they're not, what are they?
- [04:08]
NLW
Yeah, they seem to have improved at least slightly and addressed a few more concerns. But even David Sacks said in an interview he doesn't expect this to be law before, you know, late September, maybe October, November. So clearly we' in the early innings of it, I think it's just encouraging to see progress so quickly out of the Senate.
- [04:25]
Dan Tapiero
Yeah. What, what is. This was a moment. It felt to me like a momentum continuation thing.
- [04:30]
NLW
Right.
- [04:31]
Dan Tapiero
If they put out something to discuss, then people discuss it. It keeps the balls moving. If they don't, then, you know, we get drowned out and moved on to other topics. And so, you know, that's sort of how it reads to me. It's taking a bunch of concepts from, you know, previous legislation or legislative efforts, putting them together, and particularly highlighting things that are different about how they might want to approach it from the House bill. So that's where the conversation naturally, naturally trends.
- [04:58]
NLW
Yeah. And sort of in line with politics. Crypto industry boosted Lobbying to pass coveted stablecoin bill not sure how much of a story there is here when we know that the crypto lobby is now willing to spend lobby and push for anything that they want. But 6.9 million in the second quarter, 21% increase over the previous three months. So obviously there's a heavy appetite from our industry to participate in Washington and get things done.
- [05:24]
Dan Tapiero
Yeah, I mean, whatever. 6.9 million. These are lobbying numbers for ants.
- [05:28]
NLW
Like, yeah, what is this?
- [05:30]
Dan Tapiero
Yeah, no, but this is, this is, this is definitely. We haven't had very many actual summer weeks so far, but Bloomberg writing a story about that, basically says when important legislation came to be a focus, crypto lobby spent more on important legislation. Like that's really what the, the story is. So I don't think there's much to see here. Crypto lobby continues to be an important force in Washington. And you know, look, one thing that is interesting, if you're going to try to draw some actual interesting notes from this, is in the immediate aftermath of Trump winning, there was a bit of a fracturing, a bit more fracturing of the crypto lobby than we had seen, you know, which had been pretty consolidated when we all had a common enemy. Right. Which is very natural. Like you have a common enemy. So everyone comes together, they put aside their, their differences.
- [06:21]
NLW
Right.
- [06:21]
Dan Tapiero
Everyone embraces, even xrp and, and we all kind of fight together. In the immediate aftermath when it seemed like, you know, crypto was going to have an easier time of it or, you know, now was the time to kind of go on the offense, there was a bit more splintering subsequent to that as these key legislative pieces have come up. There's been, you know, it's been interesting to track how much the crypto lobby is, is acting with one voice versus, versus sort of, you know, fractional and multi different tier of voices. So to the extent that you are watching things, rather than just how much the crypto lobby spends watching to see, you know, is the group, are the groups that are representing Coinbase saying the same things that are representing sort of broader industry groups? Like those are the types of things to watch for.
- [07:02]
NLW
Absolutely. Moving on, the next topic here is the state of alt season. Crypto's altcoin season stumbles out of the gate being the first here, but you had a great breakdown sort of the implication is is alt season the beginning of the end here, but alt season or exit liquidity parsing the crypto market's next move. And then we can obviously dig into everything that's happening around Ethan treasury companies here. But interesting take here. I'll Cross crypto's all coin season stumbles out of the gate.
- [07:30]
Dan Tapiero
Yeah, I, I don't know. I mean look, the, the question is just we're, we are unmoored right now because we have so routinely had these sort of the, you know, the precedent of the four year cycle that we could lean back on and reference against. Right. And everything was either this is how it was working then or how you know, or it's doing a thing that's different than it was working then. Now we, we have such a different set of forces that I think no one really has a super clear idea of where we sit in the cycle. The cycle, what the cycle means is up for grabs. And so I think that we're trying to kind of read a lot of those different signals into things when, when we might just be in a completely different paradigm now.
- [08:14]
NLW
Yeah, that, that makes perfect sense. But moving on, we do know that certain altcoins have been moving like crazy and that is Ethereum namely, but Salon also but bit mine immersions E doubles to more than 2 billion in corporate Ethereum treasury race. I had Matt Hogan on yesterday, he talked at length about this demand shock. Clearly there's something going on with Ethereum here. I mostly attribute it to Tom Lee and the increasing interest it just finally got the catalyst it needed to trade at a reasonable price.
- [08:48]
Dan Tapiero
Yeah, I mean look, so there is a lot of like catch up that's be that's going on right now, which is important to note. Secondly, you know, you and I have talked about how, how it's sort of, it's been surprising to some extent ETH's underperformance for, for the last, you know, period of time. Just because it seemed like there was such a clear opportunity for it to be, you know, Bitcoin is the exposure to store of value. Eth is this, you know, exposure to everything else in crypto. But for whatever reason it's taken, you know, this amount of time to get here. I think that the, there's a confluence of narrative and real factors that are helping shape this. You know, the fact that people are pointing to Ethereum in sort of mainstream, you know, financial analysis as a beneficiary of the stablecoin regime passing like creates a little bit of a tailwind for them.
- [09:40]
NLW
Right.
- [09:40]
Dan Tapiero
And then you pointed out, you know, larger analysts like Tom Lee talking about it, that's another tailwind. The fact that there is now these corporate treasury structures which creates a, you know, a kind of a run back the playbook type of thing for people who have watched the bitcoin gains and wonder if it could just happen again. All of these things add up and then you, you slap them into the fact that relatively speaking, it has underperformed. Looks like a good trade.
- [10:03]
NLW
Yeah, I think it's going to keep going. Personally, it's been interesting actually to watch today. I haven't checked in the last hour or so, but Bitcoin had a nice little correction. Kind of traded down to the bottom of the range and Ethereum continued up. And so we don't even have that thing where Ethereum falls a little more than Bitcoin because there's a slight panic in bitcoin. It clearly is untethered to some degree.
- [10:23]
Dan Tapiero
Yeah. You know, I think again, Ethereum recapturing its place as sort of dominant number two and representation and representing sort of something different for an investor makes sense to me. I think, again, the thing to watch is how far down the alt spectrum does it go? You know, does it extend to Solana? Does it extend, you know, even beyond that?
- [10:46]
NLW
Right. Yeah, absolutely. We're going to see. Time will tell, certainly. And this kind of brings us into treasury companies in general. One of the big stories of the week, David Bailey's fund is up 640% after converting Trump on crypto. But the real story here is that what the fund does, this is effectively Nakamoto, to my understanding, 210 cap K capital. But they're a Treasury company that not only buys Bitcoin, but invests in other treasury companies.
- [11:13]
Dan Tapiero
Yeah. So I think that the, the story here that people have been interested in is. Well, let me take a step back. Everyone is looking for signs that treasury companies could ruin the party for everyone. That's where, that's where everyone is, right? Is are these things going to be our big blow up of, of this cycle? And, and, and so what this, what this sort of, the story has attracted attention is around ownership concentration.
- [11:36]
NLW
Right.
- [11:37]
Dan Tapiero
Because ownership concentration is the type of thing that, that, you know, can transmute wobbles and, and problems in one company to, you know, to, to a larger sort of industry phenomenon. There continues to be, I think, for people who are looking for, you know, for people who are looking for the negative signs. It's obviously a fairly hyped narrative that, and, you know, it's hard to imagine that, you know, company number 300 can really do well. I mean, even these guys are talking about how many deals they're still seeing. You know, it's just insane. The flip side is, you know, leverage. These things aren't super levered you know like it's, it doesn't have some of the hallmarks of previous, you know, kind of blow ups where you know, two different hedge funds were just trading back and forth with one another. But you know, famous last words. But I think that that's the reason that people are interested is that everyone has their super spidey senses on you.
- [12:30]
NLW
Know hard not to crypto ptsd. You have to know who the next main character of the collapse is going to be and what's going to do it. And listen, I, I, I have said exactly what you did. Company 300 is going to be bad. Question is whether that actually matters for the crypto market or just for the shareholders that were dumb enough to buy company 300.
- [12:48]
Dan Tapiero
This the scary thing is that it very rarely, you know the catalyst that rips us down very rarely comes from the most predictable place. You know. So it's like what is there to look at that's not a Treasury company is probably a more fruitful.
- [13:02]
NLW
We certainly didn't see SBF really coming so point well taken. But what we have seen coming is the institutions. JPMorgan Chase explores lending secured by clients cryptocurrencies. This came coincidentally I'm sure right on the back of Schwab saying they were basically going to do the same thing three days before. But this isn't the only sign of a massive bank and institution coming in in a different way than maybe we had seen announced. Goldman Sachs BNY to record money market funds on blockchain obviously behind BlackRock and Franklin Templeton et al who have been tokenizing treasuries here for a while. But it's pretty clear the biggest banks, the biggest financial institutions Wall street is coming and they're coming to participate in every single part of this.
- [13:48]
Dan Tapiero
Yeah, I mean the, the we fully tipped into this is just the, the, the norm at this point. You know it's, it's the all of the cracks of available products are getting filled in. It's like water flooding over you know a topography. Every, everything that is that that could be a product is going to become a product. You know, I think to some extent to the, you know, kind of extending this from the conversation that we were just having about where blowups are going to come. All we really need to avoid with this cycle is some insane blow up that makes people sort of want to run away from crypto forever. And you know, look, the best down cycle that we can imagine is one where you know, retail never fully gets in this time and you Know, gets a little bit bored again because things get boring. And, you know, what we're left with is every institution in the world offering every type of crypto product and it's just as normal as can be. And that's sort of where things are headed right now, is just the complete and utter boring normalization of everything.
- [14:50]
NLW
Yeah, exactly where we're headed. But this isn't boring. Perpetual futures have arrived in the US on Coinbase. I mean, this is crazy. This is a humongous story that would have been the biggest story ever if it didn't happen among all of these other stories. But the fact that you can go full Bitmex now on Coinbase as an American is just massive.
- [15:10]
Dan Tapiero
Well, you can go a tenth of BitMEX, right? I think 10x, 10x leverage, by the way, is still like very, very high, relatively speaking. But look, you know, perps are one of the more interesting actual kind of financial or, you know, market vehicle innovations that the crypto industry has had. There's, you know, really interesting benefits that they have over other types of structures. This, I think, is emblematic of another piece of the institutionalization story, which isn't just, you know, banks and traditional, traditional, you know, kind of financiers offering crypto products, but Wall street taking cues from the way that crypto does things and actually starting to integrate them into the mainstream system. There are, you know, again, hold aside, like, the exact leverage numbers. There are really interesting reasons to like perps as an available instrument, you know, from a market liquidity perspective. So I don't know, I think that it's a, a fairly positive thing, you know, again, not speaking to the leverage piece of it, but just having this instrument as an available tool alongside everything else, it feels inevitable to me, I guess.
- [16:16]
NLW
Yeah, I agree. I just had a glitch over here one second. And finally this was kind of a honorable mention story, but pretty big. Christie's offers 1 billion in luxury real estate to buyers paying with crypto, basically the auction house, slash, real estate, creating an entire new part of the business here to specifically sell real estate to buyers that are willing to pay with crypto. This is one of those things that has happened a little bit, but still a huge story and once again will get completely forgotten.
- [16:47]
Dan Tapiero
Yeah, I mean, look, I think that one of the things that's pretty clear is although retail hasn't moved back in fully, although, you know, again, we talked about it last week how there are some signs of it coming back to life, there's a lot of, a lot of the products that these companies are building for. And a lot of the sort of feeling of force driving them into this space is high net worth crypto buyers, you know, which represent a big, juicy market that they want to get access to. And this is sort of further result of that. So, you know, I think we're going to see more of this, and I think it's going to be less and less about novelty and capturing a headline, which is what all this stuff was about three, four years ago when you saw it. And more about. There are these extremely valuable niche markets of sort of, you know, crypto holders that are worth developing products for.
- [17:40]
NLW
Hey, we're done. But did you see the most awkward moment in TV history yesterday that I will say could be the new. Best new sitcom. Yes. Ever. I mean, I would. I would watch this show day in and day out. I don't know. It's the Odd Couple or Dumb and Dumber, Perfect Strangers. Oh, my God.
- [18:02]
Dan Tapiero
The only Trump Media that I saw yesterday was. Was south park. And that was.
- [18:06]
NLW
I didn't see it. Speaking of awkward, I mean, Trump shows up at the Fed building Powell as if he's like the contractor or something. Like, do you think that this is maybe below Powell's pay grade to be in a hard hat down there explaining the expenses of a construction project? Tim Scott's not even wearing a helmet. So the two of them are wearing a helmet completely for show. Trump pulls out a document. It's like, this is up to 3.1 billion. Powell says, that's for a building we did five years ago, man. I mean, this was pure insanity and comedy. I don't know where we're at in the simulation if we're 99% through and things are about to get bad, but it is wild.
- [18:47]
Dan Tapiero
Yeah, it's. It's something, all right. You know, Scott, I think we've finally had our first true summer week this week. When I was. When we were looking through and preparing this, I was like, man, this is. This is actually a summer week.
- [18:59]
NLW
It's a summer week relative to a 20, 25 spring week, but relative to a previous fall week, it's still more action than we would ever have.
- [19:09]
Dan Tapiero
Yeah, I guess that's true.
- [19:11]
NLW
It's just we are jaded and bored if we don't have. I mean, these stories are massive.
- [19:16]
Dan Tapiero
Whatever. I'm just saying everyone needs to touch some grass.
- [19:18]
NLW
I agree. Go touch grass. Thank you, lw. We'll be back next week. Guys, check out the breakdown to where I get all the ideas now for my show. See, I just go, hey. See, he talked about it on the breakdown. Breakdown again. Awesome show and awesome follow. We'll see you guys next week. Thanks, man.
- [19:34]
Dan Tapiero
Later.
- [19:35]
NLW
Let's go. Let's do.